President Vladimir Putin answered your questions in a unique interactive webcast with the BBC and the Russian website Yandex.

See below for a transcript of the event.

Transcript highlights of questions asked by Bridget Kendall:

[Bridget Kendall] President Putin, thank you very much for taking part in this interactive webcast with the BBC's global audience. There's been an enormous response so far on our BBC website and so far we have received over 5,000 thousand separate questions.

Many of them concern foreign affairs and our first question is from South Korea and Guiseppe Songtan who says: Given the latest missile launch by the North Koreans. How dangerous do you consider it is for the region's security and what are you, in Russia, prepared to do about it?

Our official position was declared by the foreign ministry. We are disappointed by what's going on in this sphere. Objectively speaking we understand - we know that the Korean People's Democratic Republic is not a party to corresponding international agreements which limit activities in this sphere.

That's the judicial formal side of the matter and when North Korean partners say that, they - whether we like it or not - they are right. At the same time the rights of some cannot be materialised in such a way as to infringe on the rights of others.

I'm not talking now about the situation in the region as a whole but in terms of international security but even in terms of shipping safety, tests of this kind cannot be considered normal because all civilised countries when they do conduct such tests they make it known in good time or the place and time and the projected place of landing of these objects and they warn foreign shipping. That's one thing.

Another thing is that the information in the media that some of those missiles landed in close proximity to Russia's borders. We have not confirmed that information by our own means. So I wouldn't be inclined to give it too much importance.

But then again if we look at the issue in terms of the Northern Korean nuclear research nuclear programme, of course we recognise that the very presence of nuclear weapons does mean a different problem and the problem gets more complicated with these missile tests and in future we have to concentrate not only on the North Korean nuclear programme but also review the issue in terms of means of delivery with North Korea.

But what if they don't stop, the North Koreans, what they're doing now? Colin Ray in Tokyo asks: when will Russia start using its diplomatic clout to help rein in North Korea and what would the moment be when you would agree to the idea there is at the UN moment that perhaps we should start thinking about sanctions?

I've already said that the missile tests conducted have created concern on our part and we would happily do without such gifts - meaning that these tests are conducted in a country that's next to our borders.

At the same time, these developments should not lead to such emotions that would drown out commonsense. We have to review the issue in all its entirety. We should be aiming at reinstating the negotiations process with North Korea, including those factors that have just emerged of course and we've got to create an atmosphere whereby we could arrive at a mutually acceptable compromise.

Question from Russian host [not transcribed]

One other thing before we go on to these other things, I want to say one thing about North Korea. According to our experts, in order to increase the range of the missiles that North Korea has from a thousand kilometres to three and a half thousand or to six thousand kilometres, they need to take those missiles into outer space to the trajectory of six hundred kilometres and that is impossible considering the level of the technological development in North Korea - at least for the foreseeable future.

So we don't need to worry about North Korea?

Six thousand kilometres is practically impossible - the range - and even then can either range to three or three and a half thousand kilometres. Of course that could be a cause of concern definitely, including of course for the gentleman who asked the question from South Korea. That of course should all be included in the agenda of our talks with North Korea on its nuclear and missile programme.

Questions from Russian host [not transcribed]

[Bridget Kendall] Another question about nuclear weapons, this time about Iran and we've a question from Tehran, from Marzyeh Ghazvini: What will Russia's position be on Iran's nuclear program if Iran won't accept the package of incentives that Europe and others are offering? Will Russia in that case support sanctions?

We believe that any country, including Iran, has a right of access to high technology in order to develop its economy. That of course concerns Iran in full measure. The development of nuclear technology of course should proceed under control of international bodies and of course we're against the development of any mass destruction weapons, including nuclear weapons.

So we'll be insisting on compromise decisions that would provide for tackling this two-pronged question. Russia has formulated a number of suggestions that would give access to Iran and some other countries that would give them access to technology. We would suggest a network of international centres dealing with the enrichment and utilisation of nuclear fuel.

We hope that our Iranian partners will listen to the proposals by our six countries and convey to Iran. My latest meeting with President Ahmadinejad of Iran shows that Tehran has taken a positive attitude to that. But we'd like their reaction to be more speedy. We would like the dialogue on the basis of these proposals were constructive.

You might hope that Iran will agree to a compromise but you could wait and wait for a long time. Isn't there a point at which the UN, supported by Russia, has to agree to sanctions?

I agree with you in that we cannot wait endlessly - it's counterproductive - but it's even more counterproductive to get the problem into an impasse from where we won't know how to get. So at this point I would concentrate my attention on carrying out those proposals that have been formulated by the six countries - they're constructive in my view and Russia has taken an active part in formulating them. And I understand that the Iranian leadership is ready to conduct a dialogue on the basis of these proposals and they will respond to that in August but I would believe that they could react sooner than that. Of course as someone who is hosting the G8 summit in Petersburg this month, I would have liked to receive the response before then. But of course in these circumstances we have to take into account the position of the Iranian authorities. I wouldn't still like to run ahead of things and let the professionals handle the situation at this stage.

I would prefer this problem not to be taken to the Security Council or sanctions. I would like this issue to be taken back to the IAEA provided of course the Iranian authorities give a positive reaction.

If I understand rightly then, the cut off point for an Iranian response is August, but even then you want discussion to continue in Vienna, so still any real threat that Iran might have to bear in mind sanctions, still is in the far future.

This is not our position, this is the position of all the six countries including the European three and the United States and Russia of course was party of it and we will conform to the common agreement.

Questions from Russian host [not transcribed]

I wanted to ask a question about America and just wanted to add that this is the most watched video stream on our website now and it's also being watched by thousands of people on our television channels in Britain and around the world.

As far as the United States goes we've had many emails from people who are very interested in your opinion of the United States at the moment and particularly your relations with President George Bush.

This came from Jeff Sterling, Micanopy, USA who said after the first meeting between you and President Bush, he said that he could see into your soul. Well can you see into his, and if so what do you find there?

Today President Bush is sixty. It's his birthday today; I've just spoken to him - congratulated him, wished him many happy returns of the day and we used the chance to talk about the Iranian nuclear issue, about the missile tests in North Korea - some other issues as well.

Of course we're going to have a personal meeting soon before the G8 summit and at the summit proper. We in Russia consider our relations with the United States to be a very important topic.

On some issues we consider the United States our principal partner - that's security and disarmament primarily because in terms of strategic arms the United States and the Russian Federation are the two biggest nations of the world so we have special responsibility for security.

One of the global threats today - you've just mentioned those - that's non-proliferation and disarmament. On those two issues the United States is our principal partner - just as in combating poverty, disease and so on.

The United States is also our biggest trade partner - that's one of our biggest trade turnovers is with the United States.

In terms of geopolitical changes in the world, our cooperation in all of these directions is bound to remain natural and necessary.

I would like to draw attention to this one thing: I've looked through the questions from English speaking countries - the United States, Britain - many ask how does Russia treat the fact that there's a sole superpower in the world that tries to dictate to the world how to behave.

Now our position is, the world has to be multilateral because it is so diverse. Of course we have to look for solutions and recipes that would be in the interests of all.

But there's been a lot of people on our website who've said are you Russia going to use your new clout in the world to provide a balance to the United States? Do you see that as your global role now?

I think our role is not as back in the Soviet Union to provide a counterbalance to the United States. We won't slide into that position however anybody would want that.

We will be campaigning for a multilateral world - multi polar world if you will - that would take into account the interests of a vast majority of parties to the global dialogue, including such forums as the G8.

What about George Bush's soul? What do you see there?

In the life of any political leader there's as we say the dark and light patches - it goes up and down - up and down. But irregardless of that - regardless of what his rating currently is, the main thing is for a politician to be a decent person and I believe President Bush is a decent person and to me he's a very comfortable partner. I cannot only talk to him, I can reach agreement with him.

I've had more than one chance to see that our opinions may vary - and they do - but we still arrive at some common grounds and he will take efforts, so I'm quite happy to say that such a person as Bush - not because he's the president of the United States but as a human being, I think I consider him one of the people I consider to be my friends.

Questions from Russian host [not transcribed]

But who is the main enemy of Russia now?

We would like to see, together with all the developed nations, to see among our adversaries only terrorists and we would like to counter them with the cooperation and cohesion on the international arena. And the more we cooperate the fewer questions we're going to be hearing of the kind that you're asking now.

The next theme is the top subject at the G8 summit in St Peterburg on your agenda - energy security. Many people in Europe seem very worried about security of supplies from Russia after the row that led to Russian gas being cut off to Ukraine earlier this year. And actually many questions have come in on this very subject right now on our site. Tom McLachlan in London has asked: Would there ever be a situation where Russia would use its political power to shut off the gas supplies to Western Europe?

Can I ask you a question? How much is your necklace?

That's a very unexpected question.

Well you've asked me an unexpected question.

Several hundred pounds.

Would you sell it to me for five kopeks or for one rouble? I don't think you will agree - right?

Well as you're President of Russia, perhaps I would make an exception.

Maybe the President of Russia in order to stress the closeness of relations between Russia and Britain, I would do that but Russia - in other words - my point is that Russia will not give away its resources for peanuts.

Russia for fifteen years has been supplying its neighbours with gas at prices that were well below market prices. For fifteen years we've been in fact helping our neighbours to the tune of three to five billion dollars a year for years - year in and year out. We've been talking to our partners including in the Ukraine that we have to go over to market principles and we spoke to President Yushenko about that since he came to power.

We've been talking about this year in, year out and yet we were unable to reach an agreement. So we were forced - I'm drawing your attention to this - we were forced to suspend deliveries - not to Europe mind you - but to Ukraine. So when we did suspend deliveries to Ukraine, Ukraine began to tap into the supplies that were meant for western Europe. So despite all our economic hardships - all our problems - back in the 90s, there was never once any disruption to the deliveries to western Europe.

Moreover, our complicated, sometimes dramatic talks with Ukraine have led to a positive result - positive to our west European partners - because we have ceased to determine the price during the course of negotiations. We now adhere to market principles purely and solely - that we will agree on the price with Ukraine just as we do with any country in western Europe - be it Britain, Germany. So today's price on gas is determined by the average gas price internationally. That is a perfect market mechanism to regulate this price. So Moscow is not influencing this price at which Ukraine, for instance, provides that gas.

And another thing that is very important for west European clients, throughout the years we have supplied gas to western Europe in previous years was conditioned by the prices that Ukraine bought this gas at. Now our Ukrainian partners have agreed to separate the issues. One is purchases of gas and that's one price and the other problems - totally separate - is gas transit - and this is something that does not affect the price of gas as it gets to western Europe.

But nonetheless whatever you say the impression has been created in Europe that this is political pressure on Ukraine because of the way Ukraine has developed its politics and surely at the beginning of the year to have this row wasn't a very good start to your G8 presidency. So do you regret that with hindsight?

And another question that we've had from our Russian site. Boris, from Stary Oskol, who is worried about Russia's reliance on gas and oil and says: what are you going do when the oil runs out?

I answer to the first question. Indeed the hysteria that erupted or was created in the media, primarily in Europe and in North America. Indeed that was an attempt to exert political pressure - not on the Ukraine but on Russia. Somebody wanted to press us into selling gas for peanuts. Well that's over with. Everybody has got to pay a market price. So the subsidies that we effectively used to pay to the tune to three to five billion dollars a year are done with - we're not going to pay that any more.

On the other hand we of course would be agreeable to extend economic assistance to some countries but then their economic policies should be conducive to that.

Now again we're going back to the G8 summit in St Petersburg and the assistance to developing countries. Of course we have to take into account the economic policies of those countries when we decide on extending economic assistance to them. If there's corruption in those countries why would we want to extend economic assistance to them? Let them put their house in order in the first place.
So the policies of the past 15 years are done with - we're not going back to that.

Now on other issues, is we've included in the agenda of the G8 the question of energy security. Now I've just mentioned that deliveries of gas to western Europe were in fact dependent on Russia's relations with the Ukraine. This is not going to happen so we are now talking to the Ukraine about direct deliveries to western Europe and western Ukraine will not tap into those deliveries any more. So that would be a step towards energy security for western Europe - security of those supplies of gas. So I think we're getting there - we're getting the results.

You don't think this had a bad effect on Russia's image in Europe?

Now these decisions we have taken will improve deliveries to our partners in western Europe - not only experts but also any observer will see that the situation that's obtained now is better than it used to be.

Now if you insist that we supply our gas at cheap prices to Ukraine thereby you're creating with our help, an ineffective economy in a country such as Ukraine.

Now we talk about Mittal steel and Arcelor. If we talk about vastly different prices on the supplies of gas that company, one company gets gas at fifty dollars a thousand cubic metres and the other at two hundred. What kind of competitiveness are we talking about in this situation.

Now primarily one of the main problems for us - that's an interesting question don't get in the way. One of the main questions is diversification in the economy. We're looking forward to innovation in the economy. We've created an investment fund in the economy. We're creating a venture fund - we're adopting laws on creating special economic zones where that would be oriented toward high technology.

Our budget today is calculated not from the high price of oil that is currently 73 dollars is it - slightly cheaper in Europe - but we're calculating our budget proceeding from 27 dollars per a thousand cubic metres.

Questions from Russian host [not transcribed]

Exactly on this theme, this question is from Joseph O'Donnell in Ireland who asks how you reconcile your opposition to separatism within Russia to your apparent sympathy for it in Abkhazia, South Ossetia both in Georgia and Transdniester in Moldova? Shouldn't Chechnya have the same right?

Of course everybody has the same rights. If the listener or reader knows we have conducted a referendum in the Chechen republic on the constitution and it says, black and white, that Chechnya is an inalienable part of the Russian Federation.

The people of Chechnya voted for that - 80%, more than that - not only turned up at the voting stations but they supported that decision. We spoke directly to the people - that was several years ago.

Now I may have been the only one or just about the only one in the Russian leadership who favoured such a step - the holding of a referendum in Chechnya. We have to speak directly to the people. I take full responsibility for saying what I am. I was just about the only one who insisted on that and it turned out that the Chechen people did support the constitution that was offered.

It is true, it has to be said that we took a fairly bold step - that we extended to the Chechen Republic the extensive rights of autonomy. I think that was a right decision. So the same thing can be extended to Abkhazia, to South Ossetia and other places. Since the question arrived from Ireland. OK but still we know about the problems of Northern Ireland. We know how some people in Scotland take their identity. So from what I know from history, England or the United Kingdom never held any talks on disintegration or on self-disintegration and we are not going to either.

But nonetheless this referendum in Chechnya was quite heavily criticised, particularly abroad and we've had this question on Chechnya from Youhan Mistry - one of many questions we've had on our site: Was the Chechen war worth it? Thousands of Chechen civilians were tortured, raped, displaced, Russian civilian deaths, the theatre siege, the Beslan siege and it's still not over. So was it worth it?

The first thing for criticism about the Chechen referendum. I want to draw your attention to the fact that we invited international observers in order for them to be able to control the way the referendum - the voting - was held. Strange, or maybe not, the interest was displayed by the Islamic conference organisation and the organisation of Arab states. It's those two organisations that I think would be interested in the Muslim population of the Chechen Republic to be able to express objectively their striving, fully and uninhibited to the constitution.

In their reports there were some claims of mistakes - there was some criticism - but on the whole they were deeply favourable towards how the referendum was held.

Now as to criticism from abroad towards the referendum, I don't think that was justified. In the contemporary world no arms struggle against a constitutional set up in any country can be justified. We know about the Basque country in Spain. We know in the UK it does happen the same. Now in Spain besides the Basque country there's the Catalan country. There are other European countries and of course in former Yugoslavia. I suppose you do know about separatist tendencies amongst the Hungarian population in some areas. Was it worth it for us to fight the war in Chechnya? Well we realised that we would not be left in peace by forces who have nothing in common with Chechen people. They would be using the territory as a foothold for inroads into the Russian federation.

There were masses of people who had to flee that area because of bandits, because of kidnappings and that was en masse. There were over two and a half thousand people that were openly sold or bought on the Chechen market as slaves. Do you know about that?

Now if we talk about the situation that currently prevails. Of course that attack, those inroads on Russia wouldn't be confined to just Chechnya it would have gone on. They were talking about creating an Islamic state from the Black Sea to the Caspian Sea. They wouldn't just confine themselves to Chechnya. So we don't need that in Russia with our masses of Muslim population and Europe doesn't need that either.

You say that you would never tolerate the disintegration of Russia. But anyone from Georgia who's listening to our discussion now might very well say well that holds true for us in South Ossetia and Abkhazia. We wouldn't to see them also leave Georgia.

Fine. Let them, just as we in Chechnya, hold a referendum among the local population.

Questions from Russian host [not transcribed]

This was one of the most popular questions on our site, from Keith Mullin in Singapore, who says: I recently spent 4 years working in beautiful St Petersburg, but the corruption I encountered in business and everyday life was endemic and extremely disturbing. What needs to happen before this corruption can be 'normalised', so that a foreigner can live and work in Russia without being stopped and questioned by the 'militsia' often requiring 100 rouble bribe before being free to continue?

There are two problems involved; corruption as such and the other problem - attitude to foreigners - both are equally important.

First on corruption. Corruption flourishes in developing economies - in transitional economies. In Russia it's also so current not only because of the tremendous changes in the economy but also because of the collapse of the former system of moral values of Soviet moral values and yet the management apparatus changed little. In a planned economy almost everything depended on a specific bureaucrat and that is the state of affairs that they - people in power - would have liked to preserve.

We're hoping that with the development of a civic society and that doesn't necessarily depend entirely on the state. But I'm talking about the development of the middle class - so with the growth of middle class and with support from the state, the civic society is going to develop and that is probably the most effective way of controlling, of suppressing bureaucracy and the best way of combating corruption and bribery. And of course the law enforcement agencies are going to be geared towards that.

Now as for the attitude to foreigners. We know that abroad in many countries, the problem is getting more acute. It is related to a greater influx of foreigners and the local populations sometimes tend to feel very insecure in the face of that influx, including on the labour market and that takes the form of such attitudes, abnormal sometimes criminal.

I agree with those people in NGOs, that you cannot violate the basic human rights on the basis of writing that off as waging a war on terrorism - that of course is not permissible.

Questions from Russian host [not transcribed]

Another very popular subject which some people have registered specially on our site in order to raise with you is how hard it is to get Russian visas. Here's what Mike Hetley in the Cayman Islands wrote: Twice now I have tried to get a Russian tourist visa for travel to Moscow, only to be thwarted by the bureaucracy. In fact I even wrote to you about my problems! I recall you once said that you would make it easier to get a tourist visa. Please tell me why I can't collect one on arrival at Moscow airport?

First of all I'd like to thank Michael for the question. He's given me a chance to formulate the Russian Government's position on this problem. I promise that his visa question will be resolved as soon as possible and that's a promise in exchange for a chance for me to project the Russian Government's views.

These questions are decided on the basis of reciprocity between countries. So Russia is prepared to abolish visas on a mutual basis with European countries and everybody else. But these questions have to be addressed to Paris, Berlin, Brussels and other European capitals.

We believe that after the collapse of the Berlin wall, there shouldn't be any new barriers that would restrict people's travel - at least within Europe. I want to say right away not to complicate the position of our foreign partners that Russia has some things to do to achieve and they shouldn't fear that through the territory of Russia some undesirable elements make their way into Europe. They have to be secure in that knowledge of course - I understand.

We will be talking to the European Union - our ultimate goal in talking to the EU is the travel without restrictions - without visas. We have already agreed to ease these restrictions for some categories of travellers such as students, athletes, grassroots or regional political level - for all of these people the issue of visas should be facilitated. And again our ultimate goal is travel without any visas and we're looking to sign an accord on readmitting people that have had visas issued - they would be readmitted freely.

Do you realise, besides all the talks that you need to have on this quite how bureaucratic and difficult the process is in Russia or when you deal with Russian embassies

I do imagine that and I also know what sort of problems our citizens come across when they turn to foreign embassies and it's degrading because when a young lady is refused entry visas to the United States because they tell her that we're refusing you a visa because you're going to engage in prostitution there. That's degrading - that's an insult really. So we have to agree on all these matters.

Questions from Russian host [not transcribed]

We've had people emailing us from all over the world, but particularly from Africa, worried about racists attacks in Russia. Noll, in Nairobi, Kenya asks: What is your government going to do to tackle the increasing cases of racism in Russia? I studied in Russia and was thrice beaten up by racists and now have a scar on my hand.

These are very dangerous things for Russia because it is a multinational and multiethnic, multi-religious country. These problems really are a danger to the fabric of our society. Why that happens, I've already explained, it also relates to the influx of migrant groups of various kinds and the government has not been doing enough to protect them. These problems have to be resolved and will be resolved, responsibly by legal bodies, by the judicial bodies, by law enforcement agencies. But there's a lot of education involved of course. That's what we have to do, to work with young people and of course we have to counter any extreme elements of these kinds of attitudes.

Does it worry you this type of behaviour being on the increase?

Yes I am concerned - I've already said why. Not only because it undermines Russia's authority on the international arena but because it undermines the Russian Government's efforts to create favourable conditions for internal development.

Because these African students, particularly those who've written to us, seem to feel that they really aren't protected here at all.

I can understand them and I really feel for them. We will try to do everything in our powers to change the situation.

On the other hand I would like to address myself to all the foreigners who may be in Russia or who are planning to be in Russia, you have conform to the laws that operate in Russia and not everybody does.

Questions from Russian host [not transcribed]

The next question is about democracy. It's a very popular concern on our site; what's happening to democracy in Russia. Writing to BBCRussian.com, Vitaly from Ulyanovsk, writes: I voted for you, but now the country is getting further from the principles of democracy - there is no strong opposition, almost no free elections, there is no TV and radio free of state influence. So when do you plan to return to democracy?

Honestly - and I think it is an honest conversation. I doubt it that Vitaly voted for me but I cannot really rule that out - but I doubt it.

In essence, as for democracy and freedom of the press, I'm sure that without the development of democracy, without the freedom of the press and democratic institutions, there's no future for Russia. It won't be able to cope with such problems as we mentioned, such as corruption because there won't be a sufficient level of economic freedom. We have made our choice ourselves and we believe that the democratic path is the optimum path for development of the country.

I don't think that in the previous years we were flawless in terms of democracy. There were all sorts of financial interests that financed openly or discreetly all the so called democratic outlets. We know that we've had tragic instances in all those previous years. Today we have thirty seven hundred television and radio companies. Of course you cannot control it all even if the state wanted to. So we're not curbing this process. This is a technological base for the development of our democratic process.

As for the printed media, we have, I think, forty thousand printed media outlets in this country and most of them are owned by western investors. I'm glad there are people who still are critical of the state of affairs in this sphere. That probably suggests that we are people who hold views different to those of those of the authorities. But still the very fact that I can hear this question from Vitaly is that we have democracy and it's developing in the right direction.

But nonetheless, central television is effectively under the control of the central authorities and there is an impression - whether you like it or not - abroad that Russia is becoming more authoritarian. Do you agree with that?

No of course I don't. We have a state television channel - there are two of them - Russian television and Rossiya television - that express the point of view of the state. There's the shareholders, a limited company and there's NTV that is owned by Gazprom. Yes, that's true that Gazprom is 80% owned by the state but that's only recently. But I know also that in the west there are companies that are considered independent and yet in effect they are controlled mostly by the state - by the government.

It's not the question of the state being represented or having a majority in two or three companies. But I'm telling you again that three and half thousand - even more - television and radio companies exist in Russia and the state is not even in a position - physically it cannot control all those.

Our readers also talk about the lack of a strong opposition here, which cannot be good for democracy in Russia

Of course political opposition is needed in any country - always - and we will always support political opposition. I've already said on a few occasions and at a recent meeting with a leading political party in Russia - United Russia. A successful opposition depends not only on it being an opposition but also on whether it acts in the interests of a sizeable chunk of the population.

Questions from Russian host [not transcribed]

Two questions, if you'll allow me, both from London. The first one is from Mark: nobody will ever doubt how proud Russians are of their country. What makes you Mr Putin, proud to be a Russian? But if I can add, what are you also not proud of?

And the second question which is from Gregg Davies in London: what was it like working for the KGB during the cold war and what skills do you still use a President of Russia?

I think any citizen of Russia has a right to be proud of his country. Russia cannot be viewed separately from other leading countries of the world because Russian culture is an inalienable part of world culture. The Russian people contributed immensely to world culture. I think each of our listeners or readers today knows about Tchaikovsky, Tolstoy, Lobachevsky.

They know that the first earth satellite was launched by our country. That the first cosmonaut was Uri Gagarin - a citizen of our country. There's much to be proud of. We've contributed decisively to the rout of Nazis during the Second World War. We suffered immensely and it was on the Eastern Front that the back of the Nazi war machine was broken.

But I would think that the future of our country can only be ensured if we feel full fledged members of the world community. Not least of all the European family and that's where we intend to work to primarily. I may be - well not particularly proud of that but this is what I'm aiming at. This is my primary area of concern.

We have changed the economic situation quite substantially and the social situation. I've already said that in the middle of the 90s the backlogs of salaries and pensions amounted to months and months. The situation is now quite different and the economy is quite different. We are very grateful to our partners, to our neighbours, for extending the hand of friendship and assistance when we need it. But we now have sorted out our debts to the Paris Club. We are now ready to help developing countries and we will be doing that.

In answer to the question, what are we not proud of. There's this, that Russia is a very rich country - and this is something I'm not proud of - we have so many people who are poverty stricken and what we are intending to do is to raise the standard of living. I hope we will be able to resolve that and not in some distant historical perspective but fairly soon.

As for my service in the KGB, I've never shunned questions of this sort. We did live in a different country, you've got to realise that and people involved in law enforcement and in external intelligence where I worked, we did carry out our duties to protect the interests of our country. If we set aside the ideological element of the work - the work was - the rest of it was geared towards protecting our security and my colleagues in other countries, in other services, did the same. It was a conflict of two systems. Thank God it's now in the past.

If there's anything that helps me in my work today - yes of course. Working in intelligence presupposes a great deal of - you need to be informed about a lot of things - foreign policy, internal policy. There are other things, of course you have to be able to work with people, you have to respect your partners and that's something I still do.